Hello Linda,

Every borrower has the right to challenge any information in the appraisal report. The appraiser serves as the eyes and ears of both the lender and HUD during the evaluation process.

If the appraiser found current advertising for your Bed and Breakfast—such as an active Airbnb or VRBO listing tied to your address—they are required to include this in their report.

While I don’t know exactly what details the appraiser documented—such as the presence of dishes or assumptions about business activity—you can take steps to dispute their findings:

How to Challenge the Appraisal Report:

1. Check for Active Listings: Ensure your property is not still appearing on rental platforms. If you find any lingering ads, remove them immediately.
2. Confirm License Termination: If you previously held a business license for the Bed and Breakfast, provide documentation proving it was officially terminated.
3. Request a Reconsideration: Contact your lender, explain the situation, and ask what documentation they require to confirm that the business has permanently closed.

Why This Matters for Your Reverse Mortgage:

HUD does not allow transient rental use of a property, including Bed and Breakfast operations. If the appraiser found any evidence suggesting the property is still being used for short-term rentals, the lender must either:

• Obtain proof that the business has fully ceased operations
• Deny the loan

The challenge here is that this is not just a zoning issue—it’s a usage issue. A property previously used for an ineligible purpose could, in theory, resume that use after loan closing. Because of this, lenders need clear evidence that short-term rental activity has truly ended and will not resume.

If you can provide documentation proving the business closed last year, this would strengthen your case significantly.

Related: What are the Reverse Mortgage Property Requirements